Details emerging on the proposed Lawrence recreation center

It will take $100,000 per month in lease payments for the next 20 years — and a new special sales tax district — for the city to build a regional recreation center in northwest Lawrence.

But as city officials on Friday released the most detailed figures yet for the project, Lawrence Mayor Bob Schumm said he’s becoming more convinced the project is a good deal for the city. That’s in part because the new numbers indicate Lawrence developer Thomas Fritzel and his company essentially are offering to finance the project interest free, representing a potential savings of about $8 million for the city.

“It is a gift to the city,” Schumm said of the offer. “There is really no other way to look at it.”

City commissioners at their meeting on Tuesday will receive a public briefing on plans to build a regional recreation complex on the northwest corner of Sixth Street and the South Lawrence Trafficway. Here’s a look at some of the newest details:

• The city will make $1.2 million a year in lease payments to Fritzel for 20 years, for a total of $24 million. At the end of the 20-year period, the city will own the recreation center. The city will own the ground — which is proposed to be donated by Lawrence developers Duane and Steve Schwada — from the very beginning. Fritzel — who is an executive with Lawrence-based Gene Fritzel Construction Co. — will build the center.

Schumm previously had said he expected the project to cost the city in the $13 million to $16 million range. But that was a cost estimate, he said Friday, that did not include interest costs that would have to be paid on a bond that would have financed the project. With the interest costs, the city would have paid about $24 million over a 20 year period to build a recreation center on its own, but Schumm said the center would have been significantly smaller than what is now proposed. Under the Fritzel offer, the entire $24 million will be used for construction.

“We’ll basically be getting three-eighths more of a facility than we ever thought we could get,” Schumm said.

The city would make the lease payments of $1.2 million a year to Fritzel with money that has become available as the city recently has paid off several projects — the indoor aquatics center and the Community Health Building are examples.

“We will not have to raise any taxes to build this building,” Schumm said.

Attempts to reach Fritzel for comment on his involvement in the project were not successful on Friday.

• The $24 million in payments to Fritzel will not cover any of the infrastructure and road costs to serve the site. The city has estimated it will cost about $2.4 million to extend water and sewer service to the site. Currently, the city is proposing those costs be paid for by city ratepayers.

The city doesn’t yet have a cost estimate to build roads for the site. But the city is now proposing that a special taxing district be created to pay for the roads. Under the proposal, an extra 1 percent sales tax would be charged on all sales made at the recreation center plus the approximately 100 acres adjacent to the center that would be privately-owned and commercially developed.

• The project is still envisioned to have a major Kansas University component. Schumm said he believes KU is very eager to build an outdoor track and field stadium and a soccer field at the site. Under the current proposal, Fritzel would be the builder of those facilities as well.

KU’s involvement in the project is expected to help make the center attractive to regional and national youth tournaments, which city leaders believe will provide a major boost to the city’s economy.

• Neighbors of the proposed site have filed a protest petition objecting to the proposed commercial zoning for the property. Schumm said city officials have met with area homeowners twice and will continue to meet in the future. He said several concerns center around lighting and usage of the outdoor track and field stadium. Schumm said a current design for the site attempts to keep the stadium about 600 feet away from the nearest residence.

Commissioners will meet at 6:35 p.m. on Tuesday at City Hall to receive a briefing on the project.

Comments

So what happens if Thomas Fritzel, et al, go into bankruptcy? I'm not predicting that, but should it happen, how are Lawrence taxpayers protected from all the other creditors? Will the city be the first (and only) in line for this particular asset?

It does bother me a little that they are using sales tax money from a vote almost 20 years ago and what was originally voted for is paid off. Shame on voters for not putting a time limit on it I guess. If anyone wants, we could always do a petition to put an end to the tax to a vote, but no one seems that interested in doing that.

Again Mayor Schumm misleads the public. This Commission raised the previous mil levy by stating that it was comfortable doing so because some projects with associated bonds would be retiring and keep the tax rate flat upon expiration. Based on such amnesiac statements from our restrantuer non-developer mayor OUR tax rates are going to sky rocket when Corliss needs another new fire truck to protect another tax abated Fritzel, Compton, Schwada development, but by God we'll have one heck of a place KU potential recruits can recreate and show their wares. Just remember, city league and public open court time will be from 1:00 - 5:30 a.m.

btw: Mr. Mayor or Corliss, please advise the public of just one city-subsidized project which met its projected pie-in-the-sky numbers when requesting OUR tax dollars. Good luck.

Yes, a flim-flam. And Fritzel gets a no-bid construction contract to inflate profits? Does the city get the 1 cent sales Tax, or the developers? What does that extra 3/8ths get us? 600 ft away from an outdoor concert stadium is not very far . . .

It may be a fine facility. It seems as though this location could be a hub for commercial/industrial activity that would actually bring jobs to the area. We need to get away from the "cute little college town" philosophy. That left in the 1980's. We desparately need leadership. This facility will have little impact on new jobs, other than initial construction.

Does Lawrence need yet more retail that will effectively pull retail away from all other retail aka economic displacement? This makes all existing retail struggle just a little bit more = unfriendly to business and fiscally unsound management.

The new infrastructure and secret increased sales tax is a tax increase anyway you put it. This type of sales tax is not doing well at Baur Farms nor at the Legends so radio news discussion has revealed.

Yet the people who complain so about taxes and tax increases are same one who are constantly seeking the tax dollars for their bank accounts. If a project cannot be built without special tax increases DON"T BUILD.

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We have created in the United States, largely in the last thirty years, a whole series of programs — a few of them explicit, many of them deeply hidden — that take money from the pockets of the poor and the middle class and upper middle class and funnel it to the wealthiest people in America And these are policies that either have not been reported on or the news reporting on them generally has not informed people about what they really are.

Now, in this country right now, we are spending $2 billion a year subsidizing the big four sports: baseball, basketball, football and hockey. It accounts for all of the profits of that industry and more. The industry as a whole is not profitable. And that’s astonishing because the big four leagues are exempt from the laws of competition. By the way, irony is not dead, because here are people who are in the business of competition on the field who are exempted by law from the rules of economic competition.

JUAN GONZALEZ: Well, David Cay Johnston, the American home subprime crisis has been much in the news and the enormous impact it’s having on the economy. You’ve got a few chapters here where you talk about the home and home robbery, and you even delve on an issue that very few people have ever talked about: title insurance companies and the enormous wealth transfer that have gone on there. Could you talk about that?

DAVID CAY JOHNSTON: Oh, sure. You know, when you buy a home — and I remember the first time I did it as a young man — you have this enormous sense of accomplishment, and you sit down in a room, and they throw all these papers at you — “Sign this, sign this, initial this page, OK, sign this.” So when you’re all done, you get a little sheet listing all the costs you have, and you get dinged for $15 here and $25 there. But there’s one big item called land title insurance. If you buy a $200,000 house, it will probably cost you close to $1,000. Well, it turns out that ninety cents out of every dollar you are forced to pay for this goes to pay commercial bribes. And this goes on all throughout the industry all across the United States, and nobody is prosecuted for it.

And, you know, our national myth that Ronald Reagan ran for office on was that there were all these welfare queen Cadillacs — welfare queens driving Cadillacs out there. I think there was, in fact, one scam artist who went to prison. But what’s really going on is welfare at the top, and way beyond what’s been reported in the news media as corporate welfare. We have built into the scaffolding of the new economy rules that funnel money to the top.

JUAN GONZALEZ: You also delve into this whole phenomena across America of the big box stores, the Targets and the Wal-Marts and the Kmarts. And obviously they’ve — to some, they at least offer cheaper goods, cheaper consumer goods. Your analysis of their impact?

DAVID CAY JOHNSTON: Well, first of all, they say they offer cheaper goods. I don’t accept that that’s necessarily true.

But here’s what happens. And this is a good example of where the news media hasn’t done a good job. I have tons of news clips that say, oh, this new shopping mall is coming or a new Wal-Mart or a new Cabela’s store, and thanks to tax increment financing, this store is going to be built.

Well, what is tax increment financing? I’ll tell you what it is. You go to the store with your goods, you pay for it at Wal-Mart, and there’s a very good chance that that store has made a deal with the government that the sales taxes you are required to pay, that government requires you to pay, never go to the government. Instead, those sales taxes are kept by Wal-Mart and used to pay the cost of the store. And typically in those deals, the store is tax exempt, just like a church.

Now, there are two ways that it’s important to think about this. One is, that means your kid’s schools, your police department, your library, your parks are not getting that money. And you’ll notice we keep saying we’re starved for money. We’re twice as wealthy as we were in 1980, but we’ve got to close hospitals, and we’ve got to close schools, and we don’t have money for all sorts of things like after-school programs, even though we’re twice as wealthy.

The second thing to think about is, imagine that you own Amy Goodman’s or Juan’s department store across the street. You suddenly have to compete with people whom the government is giving a huge leg up on. You think you would go broke after a while? Well, in fact, you will.

That’s not market capitalism, which is what Ronald Reagan said he was going to bring us. He said, you know, government’s the problem, we need markets as a solution. Well, that’s not the market. That’s corporate socialism. And what we’ve gotten is corporate socialism for the politically connected rich — not all the rich, the politically connected rich — and market capitalism for everybody else.

I am against the large rec center. It is for KU and commercial use. I want a smaller, cheaper faciliity near WalMart that locals are the focus. Please do not give in to developers. KU can make their own facility. I do not care about prestige only how locals will benefit from a rec center.